Mahindra & Mahindra (M & M) is a major player in the tractor and certain segments of the automobile market in India.
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International Business
Case Studies
CASE STUDY (20 Marks)
Mahindra & Mahindra (M & M) is
a major player in the tractor and certain segments of the automobile market in
India. After an impressive growth for a few years, the tractor market in India
has been stagnating during 1998-1999 to 2000-2001. M & M has been elling its tractors and utility
vehicles in foreign markets including USA. Some of the components for its
products have been sourced from abroad. M & M has a 100 per cent subsidiary
in USA, Mahindra USA, with a strong network of 100 dealers. Mahindra has a five
per cent market share in the US market in the 20-30 horse power (HP) range. As
a part of the strategy aimed at building a global supply chain, Mahindra USA
has signed a memorandum of understanding (MoU) with the Korean tractor major
Tong Yang, a part of the $ 2 billion Tong Yang Moolsam group, according to
which Mahindra will source high horse power (mostly 25-40 hp range) and sell
them around the world under the M & M brand name. To start with, the
premium range of tractors will be sold in the US. M & M’s current tractor
range is more utility-oriented and lacks the aesthetic appeal that Tong Yang’s
tractors have a must for a strong presence in the US market.
Answer
the following question.
Q1.
What are the advantages and disadvantages of global sourcing?
Q2.
How will the foreign market expansion help M & M?
Q3.
How does the strategic alliance with Tong Yang benefit M & M?
Q4.
What are the possible risks of the alliance? How can they be overcome/
minimized?
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